Intuitive Surgical, Inc. (NASDAQ: ISRG)

Intuitive Surgical’s Q2 2025 financial performance was exceptionally strong, with total revenue reaching $2.44 billion, representing a 21% increase compared to $2.01 billion in Q2 2024. This growth was driven by multiple factors including higher procedure volumes, increased system placements, and a growing installed base of systems generating recurring revenue.

The company’s profitability metrics showed robust improvement. GAAP net income increased 25% to $658 million, or $1.81 per diluted share, compared to $527 million, or $1.46 per diluted share, in the prior year. Non-GAAP net income reached $798 million, or $2.19 per diluted share, representing a 24% increase from $641 million, or $1.78 per diluted share, in Q2 2024.

The company’s balance sheet remains exceptionally strong, ending the quarter with $9.53 billion in cash, cash equivalents, and investments, an increase of $431 million during the quarter. This increase was primarily driven by strong cash generation from operations, partially offset by share repurchases and capital expenditures.

Operating leverage was evident across the business, with gross profit margin expansion supporting strong earnings growth. The company’s recurring revenue model, driven by instruments and accessories sales tied to procedure volumes, continued to provide stable and predictable cash flows.

For the six-month period, revenue increased 20% to $4.69 billion, while non-GAAP net income grew 23% to $1.46 billion, demonstrating consistent execution and market expansion throughout the first half of 2025.

Instruments and Accessories revenue, the company’s largest segment, increased 18% to $1.47 billion, driven primarily by approximately 17% growth in da Vinci procedure volume and approximately 52% growth in Ion procedure volume. This segment represents the recurring revenue base tied to procedure utilization, demonstrating strong underlying demand for robotic-assisted surgery.

Systems revenue showed exceptional growth of 28% to $575 million, reflecting strong customer adoption of the da Vinci platform. The company placed 395 da Vinci surgical systems in Q2 2025, compared to 341 systems in Q2 2024. Notably, 180 of the systems placed were da Vinci 5 systems, compared to only 70 da Vinci 5 systems in the prior year period, indicating accelerating adoption of the latest-generation platform.

Services revenue increased 23% to $391 million, benefiting from the expanding installed base and higher service contract attachment rates. This segment provides stable, high-margin revenue that grows with the installed base expansion.

The company’s system placement strategy showed strong execution, with 193 systems placed under operating lease arrangements, of which 124 systems were placed under usage-based operating lease arrangements. This compares to 175 systems under operating leases in the prior year, with 92 under usage-based arrangements, indicating improved capital efficiency for customers.

The growing installed base reached 10,488 systems as of June 30, 2025, representing a 14% increase from 9,203 systems as of June 30, 2024. This expanding foundation drives both recurring revenue growth and creates opportunities for upgrade cycles as newer technology becomes available.

Intuitive Surgical continued to demonstrate strong momentum in advancing its technology platform and expanding global market access:

da Vinci 5 System Adoption

• Accelerating Placements: 180 da Vinci 5 systems placed in Q2 2025, compared to 70 in Q2 2024, representing a 157% increase
• Customer Adoption: Strong reception from surgical teams, with improved precision, enhanced visualization, and advanced instrumentation driving demand
• Competitive Advantage: da Vinci 5 system represents the next generation of robotic-assisted surgery technology, maintaining Intuitive’s leadership position

Global Regulatory Expansion

• European Certification: Obtained European certification in July 2025 for da Vinci 5 surgical system for adult and pediatric use in minimally invasive endoscopic procedures
• Japanese Market Access: Obtained regulatory clearance in Japan for da Vinci 5 system for use in all surgical specialties and procedures indicated for da Vinci Xi, except cardiac indications
• Market Expansion: These approvals significantly expand the total addressable market for the da Vinci 5 platform globally

Ion Platform Growth

• Ion procedure volume grew approximately 52% year-over-year, demonstrating strong adoption in lung biopsy procedures
• Expanding utilization in pulmonology and thoracic surgery applications
• Complementary platform to da Vinci systems, addressing different clinical needs

The company’s innovation pipeline continues to focus on advancing minimally invasive care through improved surgical outcomes, better patient experiences, and expanded access to robotic-assisted procedures. The multi-port approach with da Vinci systems and single-port access with Ion systems provides comprehensive solutions across surgical specialties.

Future development priorities include force feedback integration for da Vinci 5 systems, expanded procedural applications, and continued miniaturization of surgical instrumentation to enhance patient outcomes and surgeon capabilities.

The company provided updated guidance for full-year 2025, reflecting confidence in continued growth momentum while acknowledging external challenges:

• Worldwide da Vinci procedure growth of approximately 15.5% to 17% in 2025, compared to 17% in 2024
• Non-GAAP gross profit margin expected within 66% to 67% range, compared to 69.1% in 2024, including estimated tariff impact of 1.0% of revenue
• Non-GAAP operating expense growth of 10% to 14% in 2025, compared to 10% in 2024

Key Outlook Considerations

• Tariff Impact: The updated gross margin guidance reflects management’s estimates of adverse tariff impacts currently in effect, with potential for additional impact if new tariffs are implemented
• Global Manufacturing: The company manufactures instruments and accessories in Mexico, endoscopes in Germany, and imports certain materials from China, creating exposure to various tariff regimes
• Procedure Growth: Continued strong underlying demand for robotic-assisted surgery, though growth rate may moderate slightly from 2024 levels
• Market Expansion: New regulatory approvals in Europe and Japan expected to drive incremental growth opportunities

Management emphasized that the tariff impact estimates assume current tariffs remain in place and could be subject to change based on policy developments. The company’s diversified global manufacturing footprint provides some flexibility to adapt to changing trade environments.

The outlook reflects management’s confidence in the underlying growth drivers of the business, including expanding adoption of robotic-assisted surgery, growing installed base generating recurring revenue, and continued innovation in surgical technologies.